2012-09-29 — theglobeandmail.com
Around here we are mighty suspicious that the anomalous under-performance of the gold shares relative to gold is evidence of a concerted manipulation (which is even easier to do in shares than in the metal) to keep the sector from "heating up". If this has been going on, it has been wildly successful.
... with deals to be had, why has the deal-making slowed so much?It's hard to ignore the fact that the share prices of gold producers haven't been keeping up with the price of gold.
Over the past decade, the Gold Bugs index has lagged the price of gold by an astounding 130 percentage points.
Blame the underperformance of gold producers on high operating costs, widespread labour disputes and the popularity of bullion exchange-traded funds as the most likely destination for gold-seeking investors.
Either way, the lagging share prices have robbed companies of an important takeover currency, and they have made acquisitions look less rewarding than funnelling excess cash to shareholders in the form of bigger dividends.
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